CalPERS demotes board member Priya Mathur for ethics violations

PRI Advisory Council member stripped of board Vice President role at giant fund

Priya Sara Mathur, the CalPERS official who sits on the Advisory Council and Board of the Principles for Responsible Investment (PRI), has been severely disciplined for violations of California campaign ethics laws by the $301.5bn (€235.6bn) US pension giant.

During a meeting of CalPERS’ board yesterday (October 15), the board’s President, Rob Feckner, told Mathur that she had been removed as Board Vice President and would no longer chair CalPERS’ Pension and Health Benefits Committee.

Mathur also must step down as Vice Chair of the fund’s board governance and compensation/talent management committees. According to press reports, Mathur did not speak during the meeting and declined comment to reporters after it ended.

The punishment comes just two weeks after CalPERS announced that Mathur had been re-elected to its board for another four-year term starting January 15, 2015. Mathur, who enjoys the backing of the public employees union AFSCME, was first elected to CalPERS’ board in 2003.

Mathur’s demotion follows a revelation last August that she had been fined by the Fair Political Practices Commission (FPPC), California’s political ethics watchdog, for not filing campaign financial statements in a timely fashion. The $4,000 fine that Mathur faces is in addition to another $13,000 worth of fines she already paid to the FPPC for not complying with required disclosures for elected or appointed state employees.

This is not the first time CalPERS has disciplined Mathur, whose main job is Principal Financial Analyst at BART,the public transportation firm for San Francisco. In May 2010, the pension fund’s board removed her as Chair of its Health Committee and temporarily suspended her travelling privileges. However, just last January CalPERS elected Mathur as its new Board Vice President, replacing George Diehr. Diehr has now taken back that post from her for the interim.

Mathur is currently seeking re-election to the PRI Advisory Council, which she has served on since 2011. She is one of three candidates for two open asset owner positions; the others are: Mark Chaloner, Assistant Director for Investments at the West Midlands Pension Fund; and Eric Loiselet, Member of the Board of Directors at French pension fund ERAPF.

Asked last August whether the PRI was aware of Mathur’s ethics violations before joining the Council and board, PRI Managing Director Fiona Reynolds said the PRI distributed information that candidates supplied in advance. This includes a biography and a statement regarding their qualifications. “We expect candidates to disclose any information they believe to be material to their candidacy in their statements prior to election,” Reynolds told Responsible Investor. The PRI is looking at its election process as part of a sweeping governance review.

The election was launched on September 29 and closes on November 19, with election results five days later. Candidates must be at CIO/CEO/board/trustee level. In her candidate statement, Mathur says she has advocated a more transparent and accountable governance of the PRI.